EX-99.2 3 q22022pressrelease.htm EX-99.2 Document

Exhibit 99.2
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BXP ANNOUNCES 2nd QUARTER 2022 RESULTS; REPORTS Q2 EPS OF $1.42 AND FFO PER SHARE OF $1.94

Exceeded Q2 2022 Guidance for EPS and FFO; Increased Full Year 2022 Guidance for EPS and FFO; Executed 1.9 Million SF of Leases in Q2; and Expanded Presence in the Seattle Market
    
BOSTON, MA, July 26, 2022 - Boston Properties, Inc. (NYSE: BXP), the largest publicly traded developer, owner, and manager of Class A office properties in the United States, reported results today for the second quarter ended June 30, 2022.
Financial highlights for the second quarter include:
•Revenue grew more than 8% to $773.9 million for the quarter ended June 30, 2022, as compared to $713.8 million for the quarter ended June 30, 2021.
•Net income attributable to common shareholders of $223.0 million, or $1.42 per diluted share (EPS) for the quarter ended June 30, 2022, compared to $111.7 million, or $0.71 per diluted share, for the quarter ended June 30, 2021.
•Funds from Operations (FFO) of $304.6 million, or $1.94 per diluted share for the quarter ended June 30, 2022, compared to FFO of $268.6 million, or $1.72 per diluted share, for the quarter ended June 30, 2021.
•EPS and FFO per share exceeded the mid-points of BXP’s guidance by $0.62 and $0.09 per share, respectively. EPS included a gain on sale of $0.55 per share, and each of EPS and FFO included $0.09 per share of better-than-projected portfolio performance. The portfolio outperformance was partially due to lower-than-projected operating expenses of $0.05 per share resulting from the deferral of certain maintenance expenses. We expect to recognize a majority of those Q2 expense savings in the second half of 2022.
BXP provided guidance for (1) third quarter 2022 EPS of $0.74 - $0.76 and FFO of $1.86 - $1.88 per diluted share, and (2) full year 2022 EPS of $5.40 - $5.45 and FFO of $7.48 - $7.53 per diluted share. See “EPS and FFO per Share Guidance” below.
Second quarter and recent business highlights include:
•Executed approximately 1.9 million square feet of leases, the strongest leasing quarter since Q3 2019 and approximately 140% of our historical 10-year average for the quarter. Notable leases include:
◦A 570,000 square foot lease for the first phase of a future life sciences development at 290 Binney Street in Cambridge, MA. The lease and the commencement of development are subject to various conditions, some of which are not within BXP’s control
◦A 125,000 square foot lease at 767 Fifth Avenue (The GM Building) in New York City, New York

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◦A 112,000 square foot lease with a life sciences client at 180 CityPoint in Waltham, Massachusetts
◦A 104,000 square foot lease at 140 Kendrick Street in Needham, Massachusetts
•Completed the acquisition of Madison Centre in Seattle, Washington, for a gross purchase price of approximately $730.0 million. Madison Centre is an approximately 755,000 square foot, 37-story, LEED-Platinum certified, Class A office property. Madison Centre was constructed in 2017, is approximately 93% leased, and is considered one of the highest quality buildings in Seattle. The acquisition was completed with a $730.0 million unsecured term loan that matures on May 16, 2023. As of June 30, 2022, the term loan bears interest at a variable rate equal to Term SOFR plus 0.95% per annum.
•Commenced two development projects within Reston Town Center in Reston, Virginia:
◦A residential property that is expected to consist of 508 units across a five-story low-rise building and an iconic 39-story tower, which will be one of the tallest buildings in Northern Virginia. The fifth floor of the tower will serve as a full-floor amenity level with a large co-working space, fitness center, sports bar/game area, communal kitchen, and numerous seating areas. A pool and a collection of fire pit areas will sit above a structured garage. The property is owned by a newly formed joint venture with an institutional partner in which BXP has a 20% interest. The joint venture obtained a $140.0 million construction loan that bears interest at a variable rate equal to SOFR plus 2.00% per annum and matures on May 13, 2026, with two, one-year extension options, subject to certain conditions.
◦Adjacent to the residential property, a Class A office and retail project that, when completed, will consist of approximately 90,000 square feet of boutique commercial space with highly efficient floor plates. Premium amenities will include a large rooftop terrace and indoor amenity space with a catering kitchen.
•In June 2022, completed and fully placed in-service 325 Main Street, a Class A office building with approximately 414,000 square feet of office and retail space located in Cambridge, Massachusetts. The office component, comprising approximately 380,000 square feet, is 100% leased.
•In June 2022, completed the sale of a portfolio of eleven suburban office properties aggregating approximately 733,000 net rentable square feet, located in Springfield, Virginia, for an aggregate gross sales price of $127.0 million. Net cash proceeds totaled approximately $121.9 million, and BXP recognized a gain on sale of real estate totaling approximately $96.2 million.
•In June 2022, refinanced the mortgage loan collateralized by Hub50House located in Boston, Massachusetts. The new mortgage loan has a principal balance of $185.0 million, bears interest at a variable rate equal to SOFR plus 1.35% per annum and matures on June 17, 2032. The property is owned by a joint venture in which BXP has a 50% interest. At closing, the joint venture entered into interest rate swap contracts with notional amounts aggregating $185.0 million effective through April 10, 2032, resulting in a fixed rate of approximately 4.432% per annum through the expiration of the interest rate swap contracts. The previous construction loan had an outstanding balance of approximately $176.7 million and matured in June 2022.
•Continued leadership and ongoing commitment to ESG and sustainability performance:

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◦In April 2022, released BXP’s 2021 ESG Report, which highlights that BXP remains on track to achieve carbon-neutral operations by 2025. Following the report’s release, BXP hosted its first ESG Investor Webcast in June 2022.
◦In May 2022, received the 2022 ENERGY STAR® Partner of the Year - Sustained Excellence Award from the U.S. Environmental Protection Agency and the U.S. Department of Energy for the second consecutive year.
◦In May 2022, BXP’s ESG rating was upgraded from ‘A’ to ‘AA’ by MSCI ESG Research. MSCI is a leading provider of in-depth research, ratings and analysis of environmental, social and governance-related business activities for the global investment community.

•In June 2022, celebrated the 25th Anniversary of BXP’s listing on the New York Stock Exchange. Representatives from BXP across the U.S. rang the closing bell on June 24th in recognition of this milestone.

The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter ended June 30, 2022. In the opinion of management, BXP has made all adjustments considered necessary for a fair statement of these reported results.

EPS and FFO per Share Guidance:
BXP’s guidance for the third quarter and full year 2022 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, the timing of the lease-up of available space, and the earnings impact of the events referenced in this release and those referenced during the related conference call. Except as otherwise publicly disclosed, the estimates do not include the impacts of any potential (1) capital markets activity, (2) future write-offs or reinstatements of accounts receivable and accrued rent balances, or (3) future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense, impairment losses on depreciable real estate, and any gains or losses associated with disposition activity. BXP is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses on depreciable real estate, or gains or losses associated with disposition activities. There can be no assurance that BXP’s actual results will not differ materially from the estimates set forth below.

Third Quarter 2022Full Year 2022
LowHighLowHigh
Projected EPS (diluted)$0.74 $0.76 $5.40 $5.45 
Add:
Projected Company share of real estate depreciation and amortization1.12 1.12 4.37 4.37 
Projected Company share of (gains)/losses on sales of real estate— — (2.29)(2.29)
Projected FFO per share (diluted)$1.86 $1.88 $7.48 $7.53 



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BXP will host a conference call on Wednesday, July 27, 2022 at 10:00 AM Eastern Time, open to the general public, to discuss the second quarter 2022 results, provide a business update, and discuss other business matters that may be of interest to investors. Participants who would like to join the call and ask a question may register at https://register.vevent.com/register/BIb368dd8ce4f440c5b320e7828f6f17f6 to receive the dial-in numbers and unique PIN to access the call. There will also be a live audio, listen-only webcast of the call, which may be accessed in the Investors section of BXP’s website at https://investors.bxp.com/events-webcasts. Shortly after the call, a replay of the call will be available on BXP’s website at https://investors.bxp.com/events-webcasts for up to twelve months following the call.
Additionally, a copy of BXP’s second quarter 2022 “Supplemental Operating and Financial Data” and this press release are available in the Investors section of BXP’s website at investors.bxp.com.

Boston Properties (NYSE: BXP) is the largest publicly traded developer, owner, and manager of Class A office properties in the United States, concentrated in six markets - Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. BXP is a fully integrated real estate company, organized as a real estate investment trust (REIT), that develops, manages, operates, acquires, and owns a diverse portfolio of primarily Class A office space. Including properties owned by unconsolidated joint ventures, BXP’s portfolio totals 53.7 million square feet and 193 properties, including twelve properties under construction/redevelopment. For more information about BXP, please visit our website at www.bxp.com or follow us on LinkedIn or Instagram.

This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by our use of the words “anticipates,” “believes,” “budgeted,” “could,” “estimates,” “expects,” “guidance,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “will,” and similar expressions that do not relate to historical matters. These statements are based on our current plans, expectations, projections and assumptions about future events. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond BXP’s control. If our underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, actual results could differ materially from those expressed or implied by the forward-looking statement. These factors include, without limitation, the risks and uncertainties related to the impact of the COVID-19 global pandemic, including the emergence of additional variants, the effectiveness, availability and distribution of vaccines, including their efficacy against new variant strains and the willingness of individuals to be vaccinated, the impact of geopolitical conflicts, including the ongoing war in Ukraine, and the severity and duration of the indirect economic impacts of the foregoing, such as recession, supply chain disruptions, labor market disruptions, rising inflation, increasing interest rates, dislocation and volatility in capital markets, job losses, potential longer-term changes in consumer and client behavior, as well as possible future governmental responses, risks related to volatile or adverse global economic and geopolitical conditions, health crises and dislocations in the credit markets, risks associated with downturns in the national and local economies, increasing interest rates, and volatility in the securities markets, BXP’s ability to enter into new leases or renew leases on favorable terms, dependence on clients’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on BXP’s accounting policies and on period-to-period comparisons of financial results, the uncertainties of costs to comply with regulatory changes (including potential costs to comply with the Securities and Exchange Commission’s proposed rules to standardize climate-related disclosures) and other risks and uncertainties detailed from time to time in BXP’s filings with the SEC. These forward-looking statements speak only as of the date of issuance of this report and are not guarantees of future results, performance, or achievements. BXP does not undertake a duty to update or revise any forward-looking statement whether as a result of new information, future events or otherwise, except as may be required by law.

Financial tables follow.

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BOSTON PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

June 30, 2022December 31, 2021
(in thousands, except for share and par value amounts)
ASSETS
Real estate, at cost$23,522,913 $22,298,103 
Construction in progress593,958 894,172 
Land held for future development583,700 560,355 
Right of use assets - finance leases237,488 237,507 
Right of use assets - operating leases168,370 169,778 
Less: accumulated depreciation(6,077,270)(5,883,961)
Total real estate19,029,159 18,275,954 
Cash and cash equivalents456,491 452,692 
Cash held in escrows46,359 48,466 
Investments in securities31,457 43,632 
Tenant and other receivables, net64,607 70,186 
Related party note receivable, net78,576 78,336 
Note receivables, net— 9,641 
Accrued rental income, net1,265,480 1,226,745 
Deferred charges, net684,078 618,798 
Prepaid expenses and other assets55,232 57,811 
Investments in unconsolidated joint ventures1,554,994 1,482,997 
Total assets$23,266,433 $22,365,258 
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net$3,269,948 $3,267,914 
Unsecured senior notes, net9,489,030 9,483,695 
Unsecured line of credit165,000 145,000 
Unsecured term loan, net728,795 — 
Lease liabilities - finance leases246,832 244,421 
Lease liabilities - operating leases204,643 204,561 
Accounts payable and accrued expenses342,467 320,775 
Dividends and distributions payable170,937 169,859 
Accrued interest payable96,821 94,796 
Other liabilities401,360 391,441 
Total liabilities15,115,833 14,322,462 
Commitments and contingencies— — 
Redeemable deferred stock units7,931 9,568 
Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding
— — 
Preferred stock, $0.01 par value, 50,000,000 shares authorized; none issued or outstanding— — 
Common stock, $0.01 par value, 250,000,000 shares authorized, 156,805,330 and 156,623,749 issued and 156,726,430 and 156,544,849 outstanding at June 30, 2022 and December 31, 2021, respectively
1,567 1,565 
Additional paid-in capital6,524,997 6,497,730 
Dividends in excess of earnings(567,016)(625,891)
Treasury common stock at cost, 78,900 shares at June 30, 2022 and December 31, 2021
(2,722)(2,722)
Accumulated other comprehensive loss(27,077)(36,662)
Total stockholders’ equity attributable to Boston Properties, Inc.5,929,749 5,834,020 
Noncontrolling interests:
Common units of the Operating Partnership660,214 642,655 
Property partnerships1,552,706 1,556,553 
Total equity8,142,669 8,033,228 
Total liabilities and equity$23,266,433 $22,365,258 







BOSTON PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended June 30,Six months ended June 30,
 2022202120222021
 (in thousands, except for per share amounts)
Revenue
Lease$721,899 $684,025 $1,440,019 $1,369,842 
Parking and other30,346 18,282 52,080 35,220 
Hotel revenue12,089 1,561 16,646 2,193 
Development and management services6,354 7,284 12,185 14,087 
Direct reimbursements of payroll and related costs from management services contracts
3,239 2,655 7,304 6,160 
Total revenue773,927 713,807 1,528,234 1,427,502 
Expenses
Operating
Rental273,848 248,703 544,103 506,092 
Hotel6,444 1,996 11,284 4,047 
General and administrative34,665 38,405 77,859 83,364 
Payroll and related costs from management services contracts3,239 2,655 7,304 6,160 
Transaction costs496 751 496 1,082 
Depreciation and amortization183,146 183,838 360,770 360,403 
Total expenses501,838 476,348 1,001,816 961,148 
Other income (expense)
Income (loss) from unconsolidated joint ventures(54)(1,373)2,135 3,852 
Gains on sales of real estate96,247 7,756 118,948 7,756 
Interest and other income (loss)1,195 1,452 2,423 2,620 
Other income - assignment fee6,624 — 6,624 — 
Gains (losses) from investments in securities(4,716)2,275 (6,978)3,934 
Losses from early extinguishment of debt— — — (898)
Interest expense(104,142)(106,319)(205,370)(214,221)
Net income267,243 141,250 444,200 269,397 
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships(18,546)(17,164)(36,095)(33,631)
Noncontrolling interest—common units of the Operating Partnership
(25,708)(12,383)(42,061)(23,422)
Net income attributable to Boston Properties, Inc.222,989 111,703 366,044 212,344 
Preferred dividends— — — (2,560)
Preferred stock redemption charge— — — (6,412)
Net income attributable to Boston Properties, Inc. common shareholders
$222,989 $111,703 $366,044 $203,372 
Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income$1.42 $0.72 $2.33 $1.30 
Weighted average number of common shares outstanding156,720 156,107 156,685 156,016 
Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income$1.42 $0.71 $2.33 $1.30 
Weighted average number of common and common equivalent shares outstanding
157,192 156,519 157,098 156,307 







BOSTON PROPERTIES, INC.
FUNDS FROM OPERATIONS (1)
(Unaudited)
Three months ended June 30,Six months ended June 30,
2022202120222021
(in thousands, except for per share amounts)
Net income attributable to Boston Properties, Inc. common shareholders
$222,989 $111,703 $366,044 $203,372 
Add:
Preferred stock redemption charge— — — 6,412 
Preferred dividends
— — — 2,560 
Noncontrolling interest - common units of the Operating Partnership
25,708 12,383 42,061 23,422 
Noncontrolling interests in property partnerships
18,546 17,164 36,095 33,631 
Net income267,243 141,250 444,200 269,397 
Add:
Depreciation and amortization expense
183,146 183,838 360,770 360,403 
Noncontrolling interests in property partnerships’ share of depreciation and amortization
(17,414)(17,113)(35,067)(33,570)
Company’s share of depreciation and amortization from unconsolidated joint ventures
21,120 15,350 43,164 33,762 
Corporate-related depreciation and amortization
(413)(444)(817)(884)
Less:
Gains on sale of investment included within income from unconsolidated joint ventures— — — 10,257 
Gains on sales of real estate96,247 7,756 118,948 7,756 
Noncontrolling interests in property partnerships
18,546 17,164 36,095 33,631 
Preferred dividends
— — — 2,560 
Preferred stock redemption charge— — — 6,412 
Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.)
338,889 297,961 657,207 568,492 
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations
34,329 29,319 66,509 55,940 
Funds from operations attributable to Boston Properties, Inc. common shareholders
$304,560 $268,642 $590,698 $512,552 
Boston Properties, Inc.’s percentage share of funds from operations - basic
89.87 %90.16 %89.88 %90.16 %
Weighted average shares outstanding - basic156,720 156,107 156,685 156,016 
FFO per share basic
$1.94 $1.72 $3.77 $3.29 
Weighted average shares outstanding - diluted157,192 156,519 157,098 156,307 
FFO per share diluted
$1.94 $1.72 $3.76 $3.28 







(1)Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), we calculate Funds from Operations, or “FFO,” by adjusting net income (loss) attributable to Boston Properties, Inc. common shareholders (computed in accordance with GAAP) for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on our balance sheet, impairment losses on our investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures and real estate-related depreciation and amortization. FFO is a non-GAAP financial measure, but we believe the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO and FFO per share to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.
Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current Nareit definition or that interpret the current Nareit definition differently.
In order to facilitate a clear understanding of the Company’s operating results, FFO should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP) or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.









BOSTON PROPERTIES, INC.
PORTFOLIO LEASING PERCENTAGES
% Leased by Location
June 30, 2022December 31, 2021
Boston91.5 %91.4 %
Los Angeles93.4 %88.8 %
New York87.8 %87.6 %
San Francisco86.9 %87.3 %
Seattle 89.1 %90.9 %
Washington, DC89.4 %87.2 %
Total Portfolio89.5 %88.8 %







AT BXP        
Michael LaBelle            
Executive Vice President,
Chief Financial Officer and Treasurer            
mlabelle@bxp.com

Helen Han
Vice President, Investor Relations
hhan@bxp.com
















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